Reminder: Surprise Billing Law Effective January 1, 2020

As reported in the October 15, 2019, edition of Compliance Corner, on June 14, 2019, Gov. Abbott signed Senate Bill 1264 into law. Employers who offer health care benefits to employees through Texas state-regulated health plans should be aware that this law became effective on January 1, 2020.

The law requires health insurers and health care providers to resolve billing disputes that arise when an out-of-network provider is paid less by the insurer than what the provider charged for a health care service or medical procedure. Before the law came into effect, the out-of-network provider would charge the patient the difference between the total cost of the service or procedure and what the insurer paid, a practice known as “balance billing” or “surprise billing.”

Effective January 1, 2020, this practice is prohibited in emergency care situations involving patients covered by Texas state-regulated health plans. Instead, the insurer and provider must resolve these issues through an arbitration or mediation process established by the Texas Department of Insurance (TDI). Rules put in place by TDI also require waivers from balance billing provisions when patients covered by Texas state-regulated health plans have a choice between out out-of-network providers and in-network providers. The rules give patients 10 days to make that choice.

The law involves no new employer compliance obligations, but employers with fully insured plans should be aware of this law.

S.B. 1264 »
TDI Rules »
Waiver Rules »
Disclosure Form »